Saturday, September 30, 2017

There has been an interesting flow of news stories lately about BigLaw firms cracking down on late time keeping.Hughes Hubbard plans to cut the salary of attorneys by as much as 20% if they don’t get their time items in on a timely basis (their definition being “within 5 days”).Simpson Thacher is doing something similar.Akin Gump’s managing partner Steve Pesner recently penned an email to his team on the subject that was unforgettable—“For those of you who think you are exempt from doing time sheets on a daily basis, I’d suggest that you re-evaluate your importance and get ready to prove that (a) you are busier than I am on legal work, (b) you are busier than I am on client development work, (c) you are busier than I am on firm work and (d) [redacted] and I do not have better things to do with our time than beg you to be responsible … and incidentally, it is my understanding that the job market is not so good right now in case you did not know.”

While these might seem like rude and forceful reactions I, for one, don’t think that these are overreactions.The timely recording of billable work enables three critical outcomes for a firm:the precise collection of billable time, the rapid collections of receivables and real time analysis of staff utilization.As you can imagine the bottom line effect in a BigLaw firm is significant, ranging in the millions each year.While the dollars are smaller, the effect on a small firm is more dramatic.

Take for instance the precision of time collection.I’ve heard higher estimates, but in my experience (at NexFirm), a timekeeper can lose as much as .3 hours per day by delaying the recording of entries to the end of the day as opposed to making them in real time.To be conservative, let’s round it down to .1, or six minutes per day.At $400 per hour, it is $10,000 per year in lost revenues.For a firm of three, call it $30,000 of pure profit out the window.I think any small firm would find this to be a meaningful amount.

Utilization management can drive even larger profitability gains. In the business of legal services, each minute that ticks away is gone forever and can no longer be monetized.Using real time entry data, a managing partner at a small firm can more efficiently allocate work to those who are not busy.If these efforts result in an additional .1 of billable hours per attorney per day, tack on another $30,000 of profit to our theoretical three person firm.

Sending bills out to your clients on time starts by having all of your time entries in the billing system, and drives a shorter cash collection cycle.It’s a bit harder to put a dollar amount against this benefit, but if you run a small firm you are undoubtedly well aware of the need to drive cash collections.

Encouraging your attorneys to track their time entries in real time can pay big dividends.To make this happen, create a billing environment that is user friendly and easily available.Create a culture that encourages real time recording of entries; start by explaining the importance of these efforts to your team, set a good example by doing it yourself and provide reminders and policing that prevent timekeepers from getting off track.

Friday, March 31, 2017

I have three active children; so I spend a good deal of
my free time coaching a variety of sports teams.It’s fun, rewarding, and at times quite
challenging.Everyone wants to win every
game we play (I am talking about the parents, of course).It's nice to win, but youth sports are about
learning, not just winning.The kids
have to make their own mistakes on the field if they are going to develop.So every game I coach, I create a
substitution grid that allows me to ensure that every player plays every
position in every game.If it is our
weakest player's turn to be in the scoring position in a tight game, so be
it.Sometimes we don't win as a result,
but the kids gain valuable experience and grow to be better players in the long
run.

In the practice of law, it seems difficult to risk taking
a "loss" in the name of cross training and professional
development.But, in terms of the long
term strength of your team, providing access to skill building is key.You, your clients and your staff benefit tremendously
from these activities.So, how can you
incorporate training into your workflow without sacrificing the firm's work
quality or reputation?

Here are a few things that have worked for our clients:

Capitalize on teaching
moments.Identify matters that are
good teaching opportunities and get junior people involved in a meaningful
way.Leveraging inexperienced resources
to provide assistance on a complicated case may increase billing opportunities,
but it is unlikely to further their learning.Assigning more comprehensive tasks on less complicated matters allows
junior attorneys to learn to assume responsibility of deliverables, and is more
likely to create lasting teaching experiences.

Delegate parts of
matters.Give a junior team member
part of a matter with clear deliverables.Not only will this give the junior member a chance to work and learn
under your supervision, but it will also give you a chance to observe the
workproduct of your staff.With feedback
and time, you will be able to trust in the quality of your staff's workproduct.

Usementoring teams.When a matter is large enough to require two
attorneys, assign one more-experienced team member and one
less-experienced.The more-experienced
attorney gets the opportunity to advise and mentor the junior member, and the
junior member gets hands-on training.It's a win-win situation.This
will also help your firm develop a culture in which junior members don't
hesitate to ask for advice when needed, and senior members take an interest in
junior members' development.

Perform an autopsy.After a matter project is completed, or an
issue occurs, dissect and critique the performance and overall results with
your whole staff.This is an excellent
way to ensure that your entire team will learn from each others' positive and
negative actions.It's also an effective
way for the managing partner to lay out a definitive process for similar
instances in the future.Performing
regular project critiques may even inspire your team to generate new and
innovative ideas.

At some point you have to let people take the plunge and
do something different.If you can't
ever feel comfortable that your team can exceed expectations without your
supervision, you don't have the right people working for you.

David DePietto is the founder and CEO of NexFirm. He can be reached at dd@nexfirm.com.